has the euro always been stronger than the dollar? and what makes a currency stronger than another?
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This entry was posted on Sunday, June 7th, 2009 at 7:54 am and is filed under Currency Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
June 7th, 2009 at 7:54 am
I think it has to do with how much money is printed. The more money, the less the value. I think the Euro always had a little more worth, but I can't remember…
June 7th, 2009 at 7:54 am
"Stronger" is not the word to use. In terms of currencies, "stronger" is only meaningful in a relative sense, over a certain time period. And in the last year the dollar has gained significantly against the Euro, so the dollar is the stronger currency (even though 1 Euro = 1.36 dollar).
OTOH, the Japanese Yen is only worth about a penny, but the Yen has been stronger than either the Dollar or the Euro lately.
If you are wondering why currencies are not equal and why one has a greater value than the other at any given time, it is because they were all created at different times and different places with different initial values. The actual unit values of different currencies are in themselves meaningless. If you picked one child and one adult at random you wouldn't expect them to be the same height and weight and have the same first name, would you? And so with different currencies.
Then aside from their initial value once upon a time, currency values the proceed to fluctuate based on supply and demand among the international currency markets for a variety of factors, such as prevailing interest rates in the country, the country's trade balance, investment opportunities within the country, etc.